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The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia

Sukuk yields mimic those of conventional bonds due to having similar features. Sukuk are shariah-compliant securities that offer different structures to those of conventional bonds. Therefore, it is believed that the spreading of yields should also be different. The presence of key institutional inv...

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Main Authors: Saa N.M., Haniff M.N., Ali N.
Other Authors: 57212028507
Format: Article
Published: Penerbit Universiti Kebangsaan Malaysia 2023
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spelling my.uniten.dspace-249092023-05-29T15:28:40Z The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia Saa N.M. Haniff M.N. Ali N. 57212028507 36491433500 35224598000 Sukuk yields mimic those of conventional bonds due to having similar features. Sukuk are shariah-compliant securities that offer different structures to those of conventional bonds. Therefore, it is believed that the spreading of yields should also be different. The presence of key institutional investors/owners and certain Board of Directors (BOD) characteristics as highlighted by the Malaysian Code on Corporate Governance (MCCG) may influence the yield to maturity (YTM) of conventional bonds and sukuk. Thus, the main objective of this study is to investigate the relationship between these two yield spreads instruments with corporate governance mechanisms. The data is obtained from firm issuers' annual reports, the Bondinfo Hub of the Malaysian Central Bank, the Rating Agency Malaysia (RAM), the Malaysian Department of Statistics and Bloomberg databases for the period beginning 2000 to 2014 for 256 and 405 tranches of long-term and medium-term issuances of conventional bonds and sukuk respectively. The most significant findings show that the presence of top-six and other institutional ownerships as corporate governance mechanism proxy insignificantly and significantly reduce yield spreads within the firm revealed by Ordinary Least Square (OLS) and random effects models in long-term and medium-term issuances. � 2019 Penerbit Universiti Kebangsaan Malaysia. All rights reserved. Final 2023-05-29T07:28:39Z 2023-05-29T07:28:39Z 2019 Article 2-s2.0-85075768674 https://www.scopus.com/inward/record.uri?eid=2-s2.0-85075768674&partnerID=40&md5=2a4e50043541e24ea7160c209e7715e1 https://irepository.uniten.edu.my/handle/123456789/24909 55 Penerbit Universiti Kebangsaan Malaysia Scopus
institution Universiti Tenaga Nasional
building UNITEN Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Tenaga Nasional
content_source UNITEN Institutional Repository
url_provider http://dspace.uniten.edu.my/
description Sukuk yields mimic those of conventional bonds due to having similar features. Sukuk are shariah-compliant securities that offer different structures to those of conventional bonds. Therefore, it is believed that the spreading of yields should also be different. The presence of key institutional investors/owners and certain Board of Directors (BOD) characteristics as highlighted by the Malaysian Code on Corporate Governance (MCCG) may influence the yield to maturity (YTM) of conventional bonds and sukuk. Thus, the main objective of this study is to investigate the relationship between these two yield spreads instruments with corporate governance mechanisms. The data is obtained from firm issuers' annual reports, the Bondinfo Hub of the Malaysian Central Bank, the Rating Agency Malaysia (RAM), the Malaysian Department of Statistics and Bloomberg databases for the period beginning 2000 to 2014 for 256 and 405 tranches of long-term and medium-term issuances of conventional bonds and sukuk respectively. The most significant findings show that the presence of top-six and other institutional ownerships as corporate governance mechanism proxy insignificantly and significantly reduce yield spreads within the firm revealed by Ordinary Least Square (OLS) and random effects models in long-term and medium-term issuances. � 2019 Penerbit Universiti Kebangsaan Malaysia. All rights reserved.
author2 57212028507
author_facet 57212028507
Saa N.M.
Haniff M.N.
Ali N.
format Article
author Saa N.M.
Haniff M.N.
Ali N.
spellingShingle Saa N.M.
Haniff M.N.
Ali N.
The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia
author_sort Saa N.M.
title The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia
title_short The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia
title_full The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia
title_fullStr The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia
title_full_unstemmed The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in Malaysia
title_sort encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in malaysia
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2023
_version_ 1806426588833644544
score 13.222552

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